* Global equities ease but off earlier lows
* U.S. crude and copper also lower, dollar rebounds
* MSCI World stock index falls 0.3 percent
(Updates prices, adds Wall Street outlook)
By Ian Chua
LONDON, Sept 18 (Reuters) - Global equities came under
pressure on Friday after having scaled an 11-month peak as
investors took stock of recent hefty gains, giving the
downtrodden dollar a reprieve and shoring up government bonds.
Wall Street, which snapped a three-day run-up in the
previous session on concerns recent gains were overextended,
showed some signs of steadying with U.S. stock futures
<SPc1><DJc1><NDc1> flat to 0.1 percent higher.
Commodity prices also retreated. Oil shed 62 cents to $71.86
a barrel and copper fell 1.3 percent to $6,282 a tonne. Spot
gold was little changed at around $1,010 an ounce.
"Whilst it is almost inevitable that there will be a
pullback on some days, it is the strength of the dips that will
be in focus," said John Murphy, an equity analyst at ODL
Securities.
"If we truly are in a bull run, investors will buy the dips.
If confidence is fragile, any dip could be perceived as the
start of the slump. Markets tend to over react on both the long
and short side, so today could well be a barometer for market
confidence."
The MSCI's all-country world stock index <.MIWD00000PUS>,
which scaled an 11-month peak on Thursday, slipped just 0.3
percent, having earlier fallen as much as 0.6 percent, while the
FTSEurofirst 300 index <> of top European shares edged
down 0.2 percent.
Banks <.SX7P>, which have surged more than 170 percent since
the March lows, were among top losers with Standard Chartered
<STAN.L> and Barclays <BARC.L> all in the red.
Lloyds <LLOY.L> fell 0.8 percent after British regulators
set tougher-than-expected terms for its exit from a government
scheme to insure it against credit losses. See []
The benchmark MSCI emerging market stock index <.MSCIEF>,
which reached a 12-month high on Thursday, lost 0.2 percent.
Earlier, Japan's Nikkei <> closed 0.7 percent lower.
OPTIMISM
Growing optimism about a global recovery from the worst
recession since at least World War Two, fuelled by a string of
upbeat economic data, has helped boost many assets over the past
few months.
According to global fund tracker EPFR, investors have been
drawing money market funds and allocating them to developed
market equity and bonds, including Europe Equity Funds.
During the second full week of September, $47.2 billion were
taken out of money market funds, marking the second biggest
weekly outflow this year and taking total year-to-date outflows
to $331.9 billion, around 10 percent of their assets, EPFR said.
The modest decline in equities helped the dollar find a
steadier footing against a basket of major currencies. The
dollar index <.DXY> rose 0.4 percent on the day to 76.461,
rebounding from a fall to a 12-month low of 76.010 earlier.
Since March, the dollar has been on a slippery slope as
investors shifted into riskier assets on increasing signs that
the global economy is on the mend.
"It's possible on Friday people are taking profits. It's too
early to tell whether it marks the beginning of a trend because
there've been no notable catalyst for now ...," said Geoffrey
Yu, currency strategist at UBS in London.
The yen was also broadly weaker and stayed pressured after
Finance Minister Hirohisa Fujii said he did not want to be
perceived as backing a strong yen.
The dollar was up 0.4 percent on the day at 91.37 yen <JPY=>
and the euro rose 0.1 percent to 134.30 yen <EURJPY=>.
Against the backdrop of modestly weaker equity and commodity
markets, lower risk European government bonds held their ground.
The euro zone's benchmark 10-year Bund yield <EU10YT=RR> was
flat at 3.339 percent. U.S. Treasury yields were slightly higher
as the market braced for next week's near record amount of
Treasury supply. The U.S. 10-year yield <US10YT=RR> edged up
about one basis point to 3.396 percent.
(Additional reporting by Atul Prakash and Emelia
Sithole-Matarise; Editing by Andy Bruce)
